No surprise - Monte Carlo is No 1 in the Global Property
Guide’s list of World’s Most Expensive Residential Real Estate Markets 2009,
more than twice as expensive, at US$45,000 per square metre, as the runner up.
Battling for the number 2 position are prime central Moscow and London. Prime
central Moscow’s US$20,853 per square metre price tag slightly outpaces core
Prime London’s US$20,756 per square metre, though it is fairer to say the two
cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow
property price declines only started in the last quarter, allowing Moscow to
catch up with London. Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey, is 6th, with an average price
of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European
cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at
8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to
US$12,000 per sq. m.
The figures are based on the average price of a 120 sq. m., good-condition
high-end used apartment in the city centres of more than 110 cities around the
world, typically the economic centres where most foreigners are likely to buy.
The data was collected during 2008. The US dollar exchange rate used is that of
January 27, 2009.
TABLE 1
Most expensive property markets(based on 120 sq. m. apartment in
city-centre )
Rank Country City/region Ave price
(us$/sq. M.)
1 Monaco Monte
Carlo 47,578
2 Russia
Moscow 20,853
3 UK
London 20,756
4 Japan
Tokyo 17,998
5 Hong Kong Hong Kong
16,125
6 USA New York
14,898
7 France Paris
12,122
8 Singapore Singapore
9,701
9 Italy Rome
9,166
10 India Mumbai
9,163
Bargain hunters’ dream
For global bargain hunters,
there are several places where property prices are relatively cheap, for example
parts of the Middle East, Latin America and Asia.
Cairo, Egypt is one of the cheapest cities in the world, with prime city centre
prices at around US$600 per sq. m. Another Middle Eastern capital in the bottom
10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.
Three Asian cities are included in the 10 cheapest, all located in rapidly
growing and heavily populated countries, Bangalore in India, Chengdu in China
and Jakarta in Indonesia.
Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital
economic, transportation and communication hub in the heartland of China.
Indonesia was the last country to recover from the 1997 Asian Financial Crisis.
However, the economic reforms implemented by the Yudhoyono administration are
setting the stage for steady economic growth.
Five Latin American cities complete the list of 10 cheapest cities for property
buyers - Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador,
and Lima in Peru.
The same countries also tend to earn good rental yields.
TABLE 2
Least expensive property markets(based on 120 sq. m.
apartment in city-centre)
Rank Country City/region Ave price
(us$/sq. M.)
112 Egypt
Cairo 574
111 India
Bangalore 657
110 Chile
Concepción 669
109 Ecuador
Quito 820
108 China
Chengdu 999
107 Nicaragua
Managua 1,080
106 Indonesia
Jakarta 1,102
105 Jordan
Amman 1,1500
104 Peru
Lima 1,154
103 Chile
Santiago 1,2211
Over-valued
Rental yields are generally
below 5% in most European cities, suggesting that property is still overvalued.
Rental yields are generally below four percent in the following cities: Munich,
Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in
Europe are lowest in Andorra at 2.2% and Athens at 2.7%.
Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo,
Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and
Geneva.
Returns from rental investments are also relatively low in key Asian cities such
as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New
Delhi, and Mumbai).
Only six cities have rental yields of more than 10%, led by Chisinau with an
average gross rental return of 14%. The Moldovan capital is followed by Cairo,
Jakarta, Manila, Skopje and Lima.
High returns can also be expected in Latin American cities. Yields range from
8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua),
Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador).
Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically
above 9%.
TABLE 3
Highest gross rental yields (%)
Rank Country
City/region Annual yield
1 Moldova
Chisinau 14.17%
2 Egypt
Cairo 12.00%
3 Indonesia
Jakarta 11.27%
4 Philippines
Manila 10.99%%
5 Macedonia
Skopje 10.11%
6 Peru
Lima 10.09%
7 Panama Panama
City 9.98%%
8 Jordan
Amman 9.73%
9 Malaysia Kuala
Lumpur 9.22%
10 Colombia
Bogota 9.19%%
11 Nicaragua
Managua 9.12%
12 Chile
Concepción 9.04%
13 Netherlands The
Hague 8.97%
14 Chile
Santiago 8.87%
15 Argentina Buenos
Aires 8.85%
16 Jamaica
Kingston 8.80%%
17 Ecuador
Quito 8.77%
18 Bahamas
Nassau 8.37%
19 Russia St.
Petersburgg 8.15%
20 Trinidad & Tobago Trinidad
8.14%
House price movements
The recent house price boom and
bust defeats the traditional notion that real estate prices are based primarily
on local conditions.
The relatively low cost and ease of moving capital around the world has made it
easier for people to invest in real estate markets in several countries. This
is complemented by the relatively lower cost of international air transport.
Several countries have also removed foreign ownership restrictions, a move
encouraged by the Organization for Economic Cooperation and Development (OECD)
and the European Union.
The result of these changes has been a remarkable increase in cross country real
estate investments – helping make the boom, and the bust, truly global.
(Source - Global Property Guide)
